The American stock market is on the doldrums as heavy losses have been witnessed by the investors. Dow Jones have fallen more than 1000 points which is incredibly low after the 2007 recession. The market doesn’t seem to recover till the end of the month of May but mid of June would be a recovery period for NYSE. NASDAQ (IXIC) and S&P (GSCP) follow the downward trend of NYSE. Reuters name the fall of stock market as “correction” but this is not what market correction is. It is only because of Euro-Zone’s debt crises which could easily put the global economic crises into jeopardy.

The Dow Jones Industrial Average has declined to almost 9% this month which is a bad indicator. Nasdaq and S&P have fallen 2.71% and 3.6% respectively which is not healthy for investors. On the other hand, UK stock market has shown some recovery in the past few days. The forecast for UK stock market is very important as it plays an important part in world economies. Signs of recovery in UK market shows that the US stock market will recover soon in the month of June. “This is the right time to by US stocks as a large market volume displacement has occurred which will recover soon profiting the investors” said Chris Jason, board member of Fed. The predictions are clear, as the market is falling and investors confused, it is time to invest and selling your shares is not a intellectual move to make.

View the full DJI chart at Wikinvest

Shares Market Basics

If you are new to investments then it is worth your time to learn some basics of shares market before you take the risk. Business, in other term is known as risk. Most people are not comfortable with crashing shares market and thus they don’t invest or take the risk for investments thus losing an opportunity for great profits.

It is true that shares market has the most highly profitable returns sometimes profit exceeding 18% in six months. This rate of return is not even possible in banking and other financial institutions whereas property and gold assets are exceptional.

A share, in simple terminology, is owning one or more share of stocks in a company. A person owning shares is called shareholder. Shareholder has no interference in the company policies whatsoever but only plays a part of investor. The shareholder will be profited if the company excels and vice versa.

Types of Shares

There are two main types of shares namely Common and Preferred. Common shares represent the majority of stocks, ownership in a company and a claim on a portion of profits (dividends). The dividend amount alters and is not definite. In the long run, common shares yields greater amount of returns than most other investments.

On the other hand, preferred shares represent a degree of ownership in a firm or a company but usually doesn’t include voting rights whereas common shares has this advantage that shareholders can vote to elect the board members. With preferred stocks, shareholders are usually guaranteed a fixed dividend amount.

How to Buy Shares

Buying Shares is easier and faster than ever before, but unquestionably no less risky. If you’re a novice investor, you’ll want to organize yourself for the unpredictable markets before investing.  For detailed post on how to buy shares please click here

Why Shares Price Change

The price of shares in general is determined by demand and supply. If there are more buyers and fewer sellers, the shares price will rise. It’s only because the shares of that particular stocks are limited and people are willing to pay higher prices for them. Similarly if there are lots of shares of stock for sale and no buyers in market then the price of that particular share will drop. Because of these factors, the shares market fluctuates very often.

Anyone can get familiar with demand and supply concept. What is difficult to figure out is what makes people buy a particular stock and reject another. The price movement of shares indicates what investors feel about a company’s worth. It is not feasible to equate a company’s value from its shares price as it is not always an accurate indicator.

Bull Market

A bull market is when economy is booming and inflation and unemployment rate is low, allowing shares price rise. It is easy to buy shares during bullish market but not recommended because what goes around comes around. Same is the case with shares market, bullish market won’t last long.

Bear Market

A bear market occurs when the economy is under stress or inflation and recession is on the rise. Our financial advisory division recommends investors to purchase stocks at the time of extreme bearish market when the prices are very low, and stick with investments until the prices rise again. This is the best investment technique and the profits gained are tremendous.

Britain’s jobs market is still vulnerable. A significant fall in employment targeted more employers planning to cut jobs than appoint new staff which is the result of joblessness in the public sector.

THE JOB MARKET | Financiere.co.uk

Around one in every three public sector employers plans to shed jobs sooner or later this year.

Sectors such as IT, computing, engineering and construction that were predominantly hit by recession are clearly on the recovery stages. The impact of the expected public sector recession on the jobs market has yet to be felt and will be executed in the next six months. The improvement in the job market is still miles away as more joblessness and fall in hiring intentions in the public sector are expected even though the economy has come out of recession.

The decade of 2000 and especially the year 2007-08 saw a great boom in economic activity all over the world. And of course the leaders of this rat race were none other than the major holders of the international market i.e. America and some European states. This resulted in soaring prices of commodities, real estate and oil at breakneck speed. By mid 2008 prices went so high that it marked global inflation to historic levels. Domestic inflation reached 10-20 years high for many nations. Inflation also increased in developed countries but remained low as compared to the developing countries. This scenario caused the formation of economic bubbles largely consisting of the real estate bubbles all over the world.

GLOBAL RECESSION | Financiere.co.uk

Ironically and as predicted by many economists, especially in America, this booming economic activity resulted in the global financial recession. One of the major causes of the recession is the absence of a responsible role of states in the international financial market. There is always a huge risk of such recessions in non-government institutions like IMF, WTO and multi-national corporations rather than the states themselves controlling the global economy. The self-regulatory mechanism in markets, generally known as free market, is a utopia and not practicable in the long run. It might work for the economic leaders for a certain period of time, due to their leadership, but will ultimately fail as it failed for Asia, Africa & Latin America.

The global financial crises had been brewing up for a while, and it actually started to show its effects in mid 2007 and finally came out in the open after mid 2008. All around the world the real estate crashed and oil prices bulled, resulting in fall of stock markets and collapse of large financial institutions. Even the wealthiest nations had to come up with rescue packages and Bailout plans for their financial system. 300 banks were bankrupted only in United States due to the contemporary recession. In its repercussions, 10 banks were bankrupted in Europe. The story does not end up here, thanks to the trickle down effect, the global financial meltdown will effect everyone in this highly globalized world; from developed countries to developing and 3rd world countries.

Our financial advisory division has warned that unemployment could rise steeply this year and has also forecasted a rise in unemployment upto 2.8 million. This is the longest period of recession since world war II. Millions of workers have felt the impact through growing unemployment, wage freezes and cuts, negative equity on houses and rising figures on house repossessions. Some of the biggest manufacturing companies in the UK have announced further job cuts in the month of February and March. Many sectors like auto manufacturing, auto parts, pharmaceutical, shopping malls, banks, garment retailers and even local authorities have announced job cuts. The total number of jobless people in UK is 2.5 million approx, which is around 8 percent of the population. The time has come for UK employees to understand that the average earnings rose at a record-low and the situation will keep on worsening till the third quarter of this year. The number of people claiming jobseeker’s allowance has now reached a record high and there are almost no new jobs in the market. The employers have raised the productivity and reduced labour costs leading to the toughest times in the history of UK.